Neways posts higher turnover and results in 2016

Transcription

1 PRESS RELEASE Annual results Neways posts higher turnover and results in 2016 Son (the Netherlands) 3 March 2016 Neways Electronics International N.V. (Euronext: NEWAY) ( Neways or the Company ), today announced its results for the full year ending 31 December OPERATIONAL HIGHLIGHTS Record net turnover of million and an improvement in normalized operating result from 10.1 million to 12.7 million Up to the next level firmly anchored in organisation, advances according to plan Clear progress made in procurement, organisation adjustment of operating companies NCWS and NME completed and development activities further expanded KEY FIGURES Net turnover % Order book (at year-end) % Gross margin 1) % Normalized operating result 2) % Operating result % Net income % Net cash flow /-8.5% 1) FY-15 Figures excluding restructuring charge of 0.4 million 2) FY-15 figure excludes a restructuring charge of 2.7 million and PPA-effect ( 1.4 million): FY-16 excludes PPA-effect of 0.9 million. The PPA-effect relates to the 2014 Bus Group acquisition. FINANCIAL HIGHLIGHTS Net turnover of million, up 5.1% year-on-year and primarily driven by Automotive, Semiconductor, and Defence sectors Order intake increased by 10.1% year-on-year, mainly due to new orders in Automotive and Semiconductors. Order book stood at million, compared to million at year-end 2015 Gross margin up 4.0% year-on-year to million on the back of higher activity level; relative margin impacted by increasing demand for box built systems and related higher levels of materials, partly offset by procurement savings Normalized operating result came in at 12.7 million, up 26.4% year-on-year driven by better capacity utilisation, stricter operational control and positive impact of organisational adjustments Net income came in at 9.7 million versus 3.2 million in 2015 mainly as result of top line growth and efficiency improvements and supported by a one-off tax revaluation of 1.2 million 2016 Proposed dividend of 0.34 per share, versus 0.11 in 2015, reflecting a pay-out ratio of 40%

2 CEO STATEMENT Huub van der Vrande, CEO: We saw continued good top line growth throughout the year and ended with better than anticipated fourth quarter sales and order intake. This proves our strong client proposition as a trusted development and technology partner. Our normalized operating result increased 26% to 12.7 million and net income tripled to 9.7 million. These positive developments reflect the strategic reform at Neways and the first concrete results of our operational improvement initiatives under our Up to the next level program. In 2016 we focussed on group-wide business processes by strengthening the coordinating role of the holding across various disciplines such as logistics and procurement. We will continue to further execute our strategy to improve our customer intimacy, technological leadership and operational efficiency. All this is done to ensure the following objective: to position Neways as the logical technology and product life cycle partner. FINANCIAL AND OPERATIONAL REVIEW Net turnover % Order book (at year-end) % Order intake (incl. internal sales) % Book-to-bill (ratio) % The 5.1% net turnover increase was fully organic. Order intake was sound during the year and particularly strong in the fourth quarter, resulting in a 14.2% increase in the order book to million and a slightly higher book-to-bill ratio of The increase in the order book and book-to-bill was largely due to new orders in Automotive and Semiconductor and benefitted from a strong intake and higher activity level in development projects. Net turnover - sector breakdown Industrial % Automotive % Semiconductor % Medical % Defence % Other % Total % The increase in net turnover was primarily driven by higher sales in the sectors Automotive, driven mainly by e-mobility, Semiconductors and Defence, which was partly offset by a decline in Medical. Gross margin % Normalized operating result % Margin 3.2% 2.7% The gross margin came in 4.0% higher on the back of the increase in net turnover. Relative to net turnover, gross margin slightly decreased to 39.1%. Demand for more complex box-built systems continued to grow, which in turn led to an increase in the level of required material components. This was partly offset by the first results from our supply chain improvement initiatives which have led to reduction of the number of suppliers and improvement of purchase conditions. Operating expenses increased by 2.4%, mainly as a consequence of higher activity levels which required more use of flexible staff in production across the group and additional costs related to enhancements in the organization to improve the centrally coordinated processes. These cost increases were partly offset by the improvements in operational execution and the savings from

3 completed organisational adjustments at two operating companies. Furthermore the 2015 operating expenses were unfavourable impacted by the subsequent acquisition integration costs of BuS Group. The normalized operating result came in 26.4% higher at 12.7 million, reflecting a margin of 3.2%, an improvement of 5 basis points. Financial expenses (net) % Tax rate 13.2% 22.5% Net income % Earnings per share ( ) % Financial expenses remained almost flat in the period under review. The expenses were unfavourably affected by higher average outstanding loans due to the higher activity level, currency differences and the costs incurred for the group refinancing. This was partly offset by 5.9 million of debt repayments during the year, which carried higher interest rates. The tax rate decreased to 13.2% in 2016, compared with 22.5% in 2015, following tax adjustments prior years. Besides net result was positively impacted by a one-off revaluation of a tax credit of 1.2 million. Net income and earnings per share tripled versus 2015 and came in at 9.7 million and 0.85 per share respectively. DIVIDEND Neways proposes a cash dividend of 0.34 per share for the 2016 year to be approved by the shareholders at the upcoming Annual General Meeting. The proposed dividend represents an increase of over 209.1% versus the 2015 dividend of 0.11 per share and a pay-out ratio of 40%, which is consistent with Neways dividend policy. The dividend will be payable as from April 28 th, FINANCIAL CONDITION Operating cash flow % Capex % Operating cash flow came in at 10.6 million, a 3.2 million or 43% improvement, mainly due to higher operating income and partly offset by payments from (restructuring) provisions. Net working capital increased to 64.4 million, up from 59.4 million at year-end Both inventories and receivables increased partly offset by higher payables due to the higher activity levels and in particular the strong sales and order intake in the fourth quarter of In the course of the year, Neways initiated measures to structurally reduce and more effectively control inventory levels of which the first results are expected to become visible in Compared to 2015 days inventory outstanding (DIO) improved from 81 to 79 days. Days sales outstanding (DSO) increased from 36 to 38 days due to the strong last quarter of the year. DSO is supported by the use of supplier finance programmes for a number of larger OEM clients, encouraging faster payments. Neways has managed to retain the level of outstanding accounts payable despite the higher activity levels. Capex was above last year level and was primarily related to replacement investments in equipment and tooling, the implementation of the new group ERP system and automotive readiness investments in China. Return on invested capital came in at 14.7% compared to 11.7% in Net cash flow amounted to 2.6 million and was positively impacted by the higher result, but was more than offset by increased working capital and payments from provisions.

4 YE-16 HYE-16 YE-15 Net debt / EBITDA Interest coverage Solvency % 41.7% 42.6% 1 Guaranteed equity as % of balance sheet total Net debt amounted to 30.0 million at year-end 2016, down 4.8% versus year-end 2015, largely due to debt repayments. EBITDA over the last twelve months (LTM) increased by 18.5% to 20.0 million versus 16.9 million. As a result, Net debt / EBITDA came in at 1.5, a clear improvement compared with year-end Interest coverage clearly improved on the back of enhanced profitability. Equity was up 11.9% at 78.9 million, from 70.6 million at year-end Solvency improved to 44.6% at year-end 2016, compared with 42.6% at year-end 2015 and 41.7% at end-june In the fourth quarter of 2016, Neways arranged a new broader credit facility of in total 57.5 million which replaced the three-year facility with ING and ABN Amro. With the new agreement, equity is to reach at least 50.0 million in 2016 and 55.0 million in 2017 and Additionally, LTM EBITDA over the last twelve months (LTM) should be at least 10.0 million. The group facility offers more favourable conditions and provides strength and flexibility in the covenants to pursue the company s growth strategy and operational improvement programme going forward. Additionally, this new agreement assures Neways a financing structure that fits the company characteristics and results on balance in lower interest expenses. OUTLOOK Neways will continue with the roll out of its group-wide improvement programme Up to the next level in While it is recognized that the geo economic circumstances remain uncertain, the order book is at a relatively high level when compared to the same period last year. Based on the strategic progress made in 2016 and the current order book, Neways expects to record a higher net turnover and operating result for the full year 2017 than in ABOUT NEWAYS ENDS Neways Electronics International N.V. (Neways) is an international company active in the EMS (Electronic Manufacturing Services) market. Neways offers its clients custom-made solutions for the complete product life cycle (from product development to after-sales service) of both electronic components and complete (box-built) electronic control systems. Neways operates in a niche of the EMS market and focuses primarily on small to medium-sized specialist series, in which quality, flexibility and time-to-market play a crucial role. Neways products are used in sectors such as the semiconductor, medical, automotive, telecom and defence industries. Neways has operating companies in the Netherlands, Germany, the Czech Republic, Slovakia and China, with a total of employees at 31 December Neways recorded net turnover of 393 million in Neways shares are listed on the Euronext Amsterdam stock exchange (symbol: NEWAY). Not for publication ENQUIRIES Huub van der Vrande (CEO) / Paul de Koning (CFO) - Tel: + 31 (0)

5 MEDIA, ANALYST & INVESTOR MEETING A combined media, analyst and investor meeting will be held today at CET at Novotel City Amsterdam, Europaboulevard 10 in Amsterdam. The slide deck will be available for download via ANNUAL REPORT Today, Neways published its annual report for the twelve months ending 31 December The annual report is available online at IMPORTANT DATES 3 March 2017 (today) Publication annual results April 2017 Publication trading update 18 April 2017 Annual General Meeting 29 August 2017 Publication semi-annual results 2017 HOME MEMBER STATE Neways announces that the Netherlands is its Home Member State for purposes of the EU Transparency Directive. FORWARD-LOOKING INFORMATION / DISCLAIMER This press release includes forward-looking statements. Other than reported financial results and historical information, all statements included in this press release, including, without limitation, those regarding our financial position, business strategy and management plans and objectives for future operations, are forward-looking statements. These forward-looking statements are based on our current expectations and projections about future events and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond Neways ability to control or estimate precisely, such as future market conditions, the behaviour of other market participants and the actions of governmental regulators. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release and are subject to change without notice. Other than as required by applicable law or the applicable rules of any exchange on which our securities may be traded, we have no intention or obligation to update forward-looking statements. ADDENDA: - Consolidated profit and loss account - Consolidated balance sheet - Consolidated cash flow statement - Statement of changes in Group equity - Additional data

6 Consolidated Profit and Loss Account Amounts x mln Turnover Costs of materials Change in work in progress and finished products Gross margin Operating expenses Personnel costs Depreciation and amortization tangible and intangible fixed assets Other operating expenses Total operating expenses Normalized operating result Financial expenses Result from ordinary activities before taxes Taxation on ordinary activities Result from ordinary activities after taxes Extraordinary expenses Taxes extraordinary expenses Valuation tax liability on loss compensation Germany Net result

7 Consolidated Balance Sheet Amounts x mln Assets Fixed assets Tangible fixed assets Intangible fixed assets Deferred tax assets Current assets Inventories Receivables Corporate income taks Cash and cash equivalents Total assets Liabilities Group equity Long-term liabilities Interest bearing loans Provisions Pension and long service awards liabilities Deferred tax liabilities Short-term liabilities Bank overdrafts Interest bearing loans Trade creditors and other payables Taxes and social security contributions Corporate income tax Provisions Total assets and liabilities

8 Consolidated Cash Flow Statement Amounts x mln Cash flow from operating activities Results before tax Adjustments for: Depreciation and amortization Costs granted staff options Finance costs Interest paid Change in provisions Received (paid) corporate income taxes Changes in working capital *) Total **) Cash flow from investment activities Investments in intangible fixed assets Investments in tangible fixed assets Sale of discontinued operations Total **) Cash flow from financing activities Returns from interest bearing loans Repayments of interest bearing loans Use of bank overdrafts Returns from options excercised Dividends paid to shareholders Total Change in cash and cash equivalents Net exchange rate differences Cash and cash equivalents as per 1 January Cash and cash equivalents as per 30 June *) Changes in working capital Inventories Accounts receivables Trade creditors and other liabilities **) Net cash flow

9 Statement of Changes in Group Equity Amounts x mln Balance as per 1 January Unrealised results Net result Exercised share options Issuance share options Dividends Balance on 31 December Additional data Amounts x mln Operating result in % of turnover *) Net result in % of turnover *) Total equity in % of balance total Average number of employees 2,565 2,593 Per ordinary share in Operating result Net result Total equity Dividends Number of outstanding shares x ,459 11,401 *) Excluding exceptional charges and PPA